Southern Michigan Bancorp, Inc. Announces Third Quarter 2020 Earnings

  • October 28, 2020
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  • Southern Michigan Bancorp, Inc. Announces Third Quarter 2020 Earnings

COLDWATER, Mich., Oct. 28, 2020 (GLOBE NEWSWIRE) — Southern Michigan Bancorp, Inc. (OTC Pink: SOMC) announced third quarter 2020 net income of $2,018,000, or $0.88 per share, compared to net income of $2,540,000, or $1.10 per share, for the third quarter of 2019. Southern earned $5,362,000, or $2.33 per share, for the nine-month period ended September 30, 2020 compared to $6,786,000, or $2.94 per share, for the same nine-month period a year ago.    
Total consolidated assets at September 30, 2020 were $934.6 million. This compared to $809.7 million at December 31, 2019.   Loan totals grew from December 31, 2019 levels of $562.9 million to $625.0 million. Deposits increased to $779.8 million at September 30, 2020, an increase of $124.0 million or 18.9 percent, from $655.8 million at year end 2019.The allowance for loan losses was $7,424,000, or 1.19% of loans at September 30, 2020 and $5,184,000, or 0.92% of loans at December 31, 2019. Excluding SBA guaranteed PPP loans the allowance at September 30 was 1.35% of gross loans. Net charge offs totaled $12,000 for the third quarter of 2020, compared to net charge offs of $36,000 for the third quarter of 2019. For the nine-month period ending September 30, 2020, net charge offs totaled $10,000, compared to net charge offs of $146,000 for the same period of 2019. Southern provided $500,000 for loan losses during the third quarter of 2020, bringing the nine-month total to $2,250,000. For the first nine months of 2019, $150,000 of loan loss provision was recorded.John H. Castle, Chairman and Chief Executive Officer of Southern Michigan Bancorp, Inc. stated, “We are encouraged that all loan customers coming out of their COVID-19 related deferrals are making payments as agreed. Our credit quality metrics remain outstanding with total non-performing assets just 0.46 percent of total assets. However, due to continued economic weakness and uncertainty surrounding COVID-19, an additional $500,000 was prudently added to the allowance for loan loss during the third quarter. We remain focused on taking appropriate actions for our customers, employees and shareholders during these tumultuous times.”The annualized return on average assets for the nine-month periods ended September 30, 2020 and 2019 was 0.81% and 1.16%, respectively. The annualized return on average equity was 8.20% for the first nine months of 2020 compared to 11.43% for the same period of 2019. The tax equivalent net interest margin for the nine-month periods ended September 30, 2020 and 2019 was 3.26% and 3.70%, respectively.Southern Michigan Bancorp, Inc. is a bank holding company and the parent company of Southern Michigan Bank & Trust. It operates 13 branches within Branch, Calhoun, Hillsdale, Kalamazoo and St. Joseph Counties, providing a broad range of consumer, business and wealth management services throughout the region.This press release contains forward-looking statements that are based on management’s beliefs, assumptions, current expectations, estimates and projections about the financial services industry, the economy, and Southern Michigan Bancorp, Inc. Forward-looking statements are identifiable by words or phrases such as “expected,” “begin,” and other similar words or expressions. All statements with reference to a future time period are forward-looking. Management’s determination of the provision and allowance for loan losses and other accounting estimates, such as the carrying value of goodwill, other real estate owned and mortgage servicing rights and the fair value of investment securities (including whether any impairment on any investment security is temporary or other-than-temporary and the amount of any impairment), involves judgments that are inherently forward-looking. There can be no assurance that future loan losses will be limited to the amounts estimated. Our ability to successfully implement new programs and initiatives, increase efficiencies, maintain our current level of deposits and other sources of funding, respond to declines in collateral values and credit quality, and improve profitability is not entirely within our control and is not assured. The future effect of changes in the financial and credit markets and the national and regional economy on the banking industry, generally, and Southern Michigan Bancorp, Inc., specifically, are also inherently uncertain. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions (“risk factors”) that are difficult to predict with regard to timing, extend, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed in or implied by such forward-looking statements. Southern Michigan Bancorp, Inc. does not undertake to update forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements.


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